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On 31 December 2018, SpareBank 1 SMN (OB:MING) released its earnings update. Generally, the consensus outlook from analysts appear highly confident, with profits predicted to ramp up by an impressive 57% next year, compared with the previous 5-year average growth rate of -6.6%. Currently with trailing-twelve-month earnings of øre1.3b, we can expect this to reach øre2.1b by 2020. Below is a brief commentary around SpareBank 1 SMN’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for SpareBank 1 SMN
What can we expect from SpareBank 1 SMN in the longer term?
The view from 6 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 16% based on the most recent earnings level of øre1.3b to the final forecast of øre2.2b by 2022. This leads to an EPS of NOK10.69 in the final year of projections relative to the current EPS of NOK9.97. Margins are currently sitting at 30%, which is expected to expand to 38% by 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For SpareBank 1 SMN, there are three key aspects you should further research:
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Valuation: What is SpareBank 1 SMN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SpareBank 1 SMN is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SpareBank 1 SMN? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.